The cryptocurrency market recently experienced a major shake-up, leading to over $341 million in liquidations within just 24 hours. According to Coinglass, Dogecoin (DOGE) was not spared, accounting for about $3.08 million of these liquidations. Most of these were long positions, highlighting a growing risk for Dogecoin’s price stability.Â
Liquidations occur when traders fail to meet the margin requirements of their leveraged positions, forcing exchanges to close these positions. This wave of liquidations not only shows the scale of market sell-offs but also affects how prices move. For Dogecoin, the increase in long position liquidations shows its value might soon test its lower support levels.Â
Had short positions been more affected, Dogecoin could have seen a quicker recovery. The surge in trading volume above $700 million indicates sustained market interest but also highlights the potential for further declines.Â
Trading volume is an important metric, showing how much an asset is being traded and potentially indicating its future price direction. When trading volume rises alongside price, it usually confirms an uptrend. But when volume falls as prices rise, it may signal weakening momentum, hinting at a potential drop in value.Â
For Dogecoin, the recent increase in volume, paired with a price drop, suggests that its downward trend might continue. If the trend holds, DOGE could drop below $0.10 again, as it did earlier today.Â
DOGE Price Outlook: Challenges AheadÂ
Looking at the daily chart, Dogecoin seems poised to retest its support level near $0.10. The cryptocurrency is also facing resistance at this same price, making it harder for bulls to push the price higher unless they can break through this barrier.Â
Adding to the bearish sentiment, Dogecoin is currently trading below a descending triangle pattern. This technical pattern, marked by a declining upper trendline and a flat support line, signals potential lower prices. If DOGE fails to break above this triangle, its price could fall further to around $0.097 or even as low as $0.080 in a worst-case scenario.Â
On the upside, if Dogecoin manages to break above the descending triangle, a sharp reversal could occur, potentially pushing the price up to $0.12. However, this optimistic outlook will depend on broader market conditions and investor sentiment.Â
